ESIC - India Payroll
Employee and Employer contribution in ESIC
Currently the ESIC contribution is
1. Employee Contribution 0.75% of monthly wages rounded up to next higher rupee
2. Employer Contribution 3.25% monthly wages rounded up to next higher rupee
For newly implemented areas, the contribution rate for first 24 months (w.e.f.
06.10.2016) are
1. Employee Contribution 1.00% of monthly wages rounded up to next higher rupee
2. Employer Contribution 3.00% of monthly wages rounded up to next higher rupee
Month for ESIC Registration you can set in Payroll Setup.
Setting up ESIC
1.
Go to Setup > EazeHR > Payroll Setup > Company Setup
2. If there are multiple companies select the company name else you can directly
update the ESI parameter as shown below
Monthly Wages for ESIC Deduction
To
calculate monthly wages the system will use the heads selected in "Deduction and Encashment" table. If there is payment of salary arrears whether ESI will be deducted on
it or not will depend upon the setup parameter shown in previous section.
Eligibility for participation in ESIC
As
per revised norms employees with monthly wages of upto INR 21,000 are eligible
to participate in ESI. ESI participation eligibility is always checked at the
end of September or March payroll and if employee's salary is crossing the threshold
value system would exclude them from ESIC. If an employee's salary has been reduced
from a value which was higher to below INR 21,000 then system will show his name
when payroll for October or April is being run and the Payroll Manager can include
him in ESI. The calculation of threshold value of INR 21,000 is always done from
the Salary Structure values and not from the actual payout being made in September
or March because the actual payout might be higher or lower due to arrears or
leave without pay or leave encasement.
However there is a provision which allows the employee to continue to opt in ESIC if he has been already participating in it even after his wages go beyond 21,000. Refer to the write-up on "Continuing in ESI" for more details.
Payout of Maternity Benefits to Employees Covered in ESIC
As
per law if an employee is covered in ESIC and is goes on a Maternity leave then
the wages are covered / paid by the ESI Corporation. EazeHR has this feature
available and to use this the Maternity leave feature in Leave module should
be first activated. Refer article on "Maternity Leave Setup" for more details.
When payroll is run system will check the number of days of Maternity / Commissioning
or Adoption leave an employee who is covered in ESI has taken and will reduce
it from the payout. For the purpose of calculating the payout system will
1. Not stop payment of Adhoc or Variable heads but any head with Fixed or % of
Gross attribute would not be paid. Refer to the article on "Components of Salary Structure" for more details
2. The deduction will be done keeping the total number of days in the month as
the basis
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Example -
Basic Salary = 15000
No of days employee is on Maternity Leave in April = 20
Basic paid to employee in payroll would be = 15000 x 10 / 30 (assuming no other leave without pay deduction)
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